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6 October 2023updated 17 Oct 2023 11:05am

A path to green growth

Net zero presents an opportunity to revive the UK’s ports and coastal communities.

The UK is facing profound structural challenges. Global supply chain shocks, the pandemic and geopolitical tensions are layered upon underlying elements of economic fragility and regional disparities – including in too many coastal communities. These socio-economic challenges are occurring at the same time as the existential threats of climate change and biodiversity erosion.

And yet solutions and opportunities tied to these challenges are also in front of us and interrelated. In particular, the need to deliver a sustainable, reliable and affordable supply of energy offers the UK – and its coastal areas – the chance of growing investment, jobs and prosperity in a way not seen for generations. In short, there has never been a better time to be a windy, coastal nation with significant geological features and passionate local communities.

With a general election just around the corner and manifestos being written, it’s time for politicians to really grasp and maximise the opportunities for coastal green growth.

As a maritime nation, the UK’s ports can provide the basis for a new, low-carbon economic model and help address the long-standing regional imbalances that have come to characterise the British economy. Once the bedrock of the Industrial Revolution, ports are once again becoming critical to driving transformational change, enabling the decarbonisation of energy generation, industry, transport and logistics. As the UK’s leading ports operator, Associated British Ports (ABP) is committed to investing in the green energy infrastructure and services needed to deliver the clean energy transition and create lasting prosperity for our coastal communities.

The UK is already a global leader in offshore wind, with the world’s largest offshore wind farms already operational in its waters. The UK is well-placed to support the continued growth of the fixed-bottom offshore wind sector, while expanding into the nascent technology of floating offshore wind (Flow). The development of Flow offers a huge opportunity for the UK to not only lead in the deployment of green energy infrastructure, but to establish itself as a leader for manufacturing and integration. That’s why ABP is preparing to invest more than £500m to transform Port Talbot into a critical hub for Flow in the Celtic Sea.

The UK is also well-placed to lead on the development of green hydrogen and carbon capture, utilisation and storage (CCUS) technology. As multimodal hubs for transport and logistics, often adjacent to major industries and sources of renewable energy, ports are ideally located to serve as generation, storage and distribution sites for green hydrogen. 

Shipped carbon will also have an important role to play in connecting dispersed industrial sites that otherwise lack direct access to storage. The UK benefits from ample geological storage for carbon sequestered in industrial sites across Europe, and this should also be seen as a clear opportunity for the UK to lead.

To support the growth of these strategic sectors, a new coastal industrial and green energy strategy is needed that provides an integrated view of how to develop future energy and manufacturing assets to drive competitive advantage. The strategy should include a new, more forward-leaning approach to domestic infrastructure development and localising supply chain investment. This would mean following the example of the US, EU and Japan, in using state investment to support building domestic industrial capacity. In the UK, we have an opportunity to take a creative approach to building local content requirements into seabed auctions and the Contracts for Difference (CfD) bidding processes. This should place greater emphasis on enforceable local content requirements to ensure manufacturing is established and then supported in the UK.

The strategy requires new thinking about points of offshore energy landfall, and a new “Green Energy zones” approach to nodal or sub-regional energy pricing. While grid connections are a known issue, we need more focus on where landfall is made – allowing new clean-energy supplies to trigger industrial development. We should also ensure that the cheaper energy that is available in coastal areas is used to attract global manufacturing investment to the UK. Regional energy pricing is common internationally and the UK could follow these examples to support domestic industry.

New policies are needed to support CCUS and green hydrogen to enhance Advertorial In partnership with cluster development. To maximise the role of ports in alternative energy growth, the government needs to accelerate CCUS Track-2 approvals for projects with substantial shipping capacity and provide a fair treatment for green ammonia in its official hydrogen production business model (which currently excludes this fully renewable energy source as a feedstock). This would help the UK match the EU’s Green Deal policy. It would also be helpful to extend the timeframes for fiscal incentives for sites with freeport status.

The strategy needs to encourage nextgeneration planning and permitting that’s fit for the scale and speed of change needed. This is not a call for wholesale deregulation. Instead, what is urgently needed is greater resourcing to enable the planning system to meet the current challenge. A wider cultural shift within the regulator community is also necessary to deliver the scale of the infrastructure response needed to get to net zero. Environmental protection now depends on our ability to successfully implement new zero carbon infrastructure at pace, and good planners and regulators will need to work pro-actively with developers to promote environmentally sound infrastructure. The UK has an opportunity here: in the US, planning reforms aimed at fast-tracking new electricity grid corridors have stalled. If these issues are sorted in the UK, we can get a competitive advantage.

Finally, improved surface connectivity would reinforce the manufacturing renaissance we are seeking. To grow the role of coastal economies in nextgeneration manufacturing, major ports should be recognised as core nodes on the proposed strategic freight network, connecting ports to distribution terminals where containers transfer between trains and electric HGV lorries for final distribution. Key transport infrastructure decisions need to be prioritised.

The UK is in a highly competitive global green-growth race. The steps taken in the US and other major economies are a response to, and further catalyst for, the twin macrotrends of decarbonisation and green growth. It is therefore essential that the UK responds with a bold and coherent industrial strategy. The UK’s future economic prosperity and a new renaissance for many coastal communities are inherently linked to the green-energy transition. With the right policies and investment, we can use this moment of flux to our advantage and set in train a process of industrial rejuvenation and sustainable economic growth.

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